THE INVESTOR BUSINESS MODEL

“I think big media companies that are looking for paths forward are wise to participate, even if modestly, in the startup world. The visibility and signals the market sends can be immensely valuable in thinking through approaches that might benefit a larger group.”

— Marcus Brauchli, co-founder and managing partner of North Base Media, a media investment firm

Being an investor, like being an IT provider, is not for the feint of heart or those with thin wallets. Most media companies’ resources are either insufficient to be making big investments or are tied up in reinvesting in the company itself. But some of the legacy media companies still have the wherewithal to make substantial investments in a wide variety of companies in a wide variety of industries. Usually, however, the investments are made with an eye either toward gaining a foothold in a new area of media or in a promising industry related to the media company’s expertise.

But for those who do invest, the results can be both financially lucrative and immensely beneficial for both the media mission and the business mission of the company. Investing provides perhaps a potential new source of revenue and almost certainly unique insights into new technologies, new markets, and new (and potentially competitive) businesses.

That said, they can also tank, resulting in the loss of all or most of the money invested. Proceed with caution.